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Daily Base Metals Report

Pockets of Volatility Centre on Copper and Silver

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • US investors are on the sidelines as they await the key nonfarm payroll release tomorrow. 
  • The ECB cut interest rates by 25bps as expected, indicating that it is nearing the end of its rate-cutting cycle.
  • A combination of a weaker dollar and warrant cancellations led LME copper to break through the $9,700/t resistance level.
  • Gold prices remained elevated, while silver surged to a March 2012 high of $35.60/oz. 

Macro

US stocks opened higher today, buoyed by the news that China and the US were engaged in trade talks, pushing the S&P 500 toward the key 6000 resistance level. However, this risk-on sentiment lost steam later in the session as investors turned cautious ahead of tomorrow’s US jobs report, which is expected to show a slower hiring pace in May. Labour market concerns are already brewing, with ADP figures lower than expected and today’s initial jobless claims showing that applications for unemployment benefits rose to 247,000 in the week ending May 31st, the highest level since October. This data suggests emerging cracks in the labour market that could be further highlighted in the upcoming employment figures. 

On the trade front, the US trade deficit narrowed by a record amount in April, driven by the largest-ever plunge in imports, reflecting the unwinding of earlier front-loading strategies. This is likely to weigh on second-quarter GDP growth. The dollar index weakened, edging closer to its April low of 98.00, trading at 98.50 at the time of writing. Meanwhile, the 10-year Treasury yield rebounded from yesterday’s weakness, stabilising at 4.34%. 

In Europe, the ECB delivered a widely expected 25bps cut, citing the nearing end of its easing cycle as the economy continues suffers from the blows of US tariffs. While such a move would typically weigh on the euro, EUR/USD extended its gains to 1.14, supported by broad-based dollar weakness. Looking ahead, markets now expect the ECB to deliver just 31bps of additional cuts for the remainder of this year, compared to 55bps anticipated by the Fed. This relative policy divergence should support the euro further over the longer term.

Base Metals

Copper prices surged today, breaking decisively above the key $9,700/t resistance level, driven by persistent dollar weakness and continued pressures from warrant cancellations. This move ends the consolidation phase that has capped copper’s upside momentum in recent weeks.  At the same time, the COMEX/LME arb continued to widen, with the COMEX premium nearing $1,500/mt. Other metals struggled to follow suit, with aluminium’s upside stalled by the robust resistance of $2,500/t. Lead and zinc held their nerve at $1,978/t and $2,686/t, respectively. Nickel is seen wavering around the $15,500/t mark, struggling to find direction. 

Precious Metals and Oil

Oil futures climbed following a call between former President Trump and President Xi, which was interpreted as a sign of easing trade tensions, prompting WTI and Brent to return to $63.50/bbl and $65.50/bbl, respectively. Gold held steady near $3,360/oz, maintaining its elevated levels, while silver surged over 3.0% intraday to reach $35.60/oz — its highest level since March 2012. 

Lme Metals Price And Volume 05062025

All price data is from 05.06.2025 as of 17:30

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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